A new analysis from the Minnesota-based Land Stewardship Project is critical of the federally subsidized crop insurance program.
The analysis, Crop Insurance -- the Corporate Connection, claims the program "lacks accountability and transparency" and generates huge profits for a small number of big corporations.
Federal crop insurance seeks to protect farmers from "unavoidable risk" associated with bad weather, crop disease and insects. Taxpayers pick up some of the cost, farmers the rest.
As the Land Stewardship Project's analysis notes, the federal government sets the terms for crop insurance and private corporations sell and administer the insurance products offered to farmers. In 2014, 19 corporations were designated as approved insurers, with the list including Wells Fargo, John Deere Insurance Co., American Farm Bureau Services and Archer Daniels Midland Crop Risk Services, according to the analysis, which is based on government data and interviews with farmers from across Minnesota.
According to the analysis: between 2003 and 2012, the federal government paid crop insurance corporations a total of $42.1 billion in premium subsidies and $12.5 billion in administrative reimbursements. In this same period, the federal government also paid out $4.1 billion in underwriting losses and additional costs, bringing the total taxpayer bill to $58.7 billion for the 10-year period.
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There's not enough accountability in how that money is spent, says Paul Sobocinski, a crop and livestock farmer in Wabasso, Minn. He's involved with the Land Stewardship Project, which seeks "to foster an ethic of stewardship for farmland, to promote sustainable agriculture and to develop sustainable communities," according to the organization's website.
Sobocinski also tells Agweek federal crop insurance props up big and established farmers at the expense of small operators and ones trying to get started.
The analysis can be found at landstewardshipproject.org.
